What Drives Child Penalties ? Evidence from a Global Organization

How do child penalties emerge within organizations? This paper studies how parenthood affects careers at the World Bank Group, exploiting variation in the timing of first childbirth among eventual parents in a staggered event-study difference-in-differences design. The paper estimates a 3.1 percent motherhood earnings penalty over the first six years after childbirth, primarily due to slower grade progression, while fathers experience no significant earnings loss. Mothers’ annual performance evaluations show no persistent deterioration. After childbirth, mothers take on fewer leadership responsibilities and travel less for work: they are less likely to initiate development projects and supervise external consultants. By contrast, the quality of realized outputs is not affected by parenthood. Mothers increasingly sort into positions with lower promotion potential, greater scope for home-based work and lower travel demands, where child penalties tend to be smaller. Together, these findings point to an advancement–flexibility trade-off: following childbirth, mothers shift away from responsibilities and positions conducive to career advancement, without persistent declines in observable performance.